Turkey Aims for the Top 10 in the Global Defence Industry
On the media day, Chairman of Defence and Aerospace Industry Exporters’ Association (SSI) Mr. Latif Aral Aliş made statements on the export figures of year 2014 as well as on their goals for the upcoming period and expressed that the sector has arrived at the point where it exports one third of its products and added that they aimed to place at least seven Turkish companies at the top 100 companies in the world. Regarding 2014 export figures, Mr. Latif Aral Aliş said, “We are taking the required steps to become a worldwide brand in the defence industry where competition is challenging. Our exports increased from 884 million USD to 1 billion 647 million USD in three years. The synchronized efforts of the Ministry of Finance, Ministry of National Defence, Undersecretariat for Defence Industries and Turkish Armed Forces have a significant role in this success”.
Latif Aral Aliş: “Governmental Guarantee should have a Key Role in Turkish Defence Industry Export”
Mr. Latif Aral Aliş underlined the importance of interstate sales which has to become a national policy for sustainable success and expressed the sector’s expectations regarding exports as such: “We expect a financial support to our sector’s developing export through private loans in addition to the achievement of progress in treasury aided and country-based defence industry loans. We assess that the foreign military sales (FMS) is a substantial method to increase our companies’ exports in brand new markets with the countries of our region with the support and guarantee of our government. We anticipate our government to adopt the relevant regulations in order to conduct effective foreign military sales. The increase of the governments’ procurement from domestic defence industry and the entry of the products developed by our companies into the governmental inventory constitute the most inquired issues in foreign markets. Therefore, Turkish Armed Forces and Interior security forces’ preference of our domestic products bears great importance in terms of reference”.
Latif Aral Aliş: “Our 2015 Target for Exports is 2 Billion USD”
SSI Chairman Mr. Latif Aral Aliş stated that they aimed to increase the rate of export growth to 20% from 18% in 2015 and added, “Among all the sectors, ‘Defence Industry’ was the one to seize the greatest acceleration. Defence industry is considered as a technological sector worldwide. This is an indicator. A country’s development can be associated with the development of its defence industry. We identified our export target as 25 billion USD for year 2023 which is the 100th anniversary of the establishment of the Turkish Republic. We desire to take place at the top 10 of world defence industry. Today, as a country that manufactures its own satellite, unmanned aerial vehicle, training aircraft, helicopter, battleship, missile and rocket systems, develops simulations and software, becomes partners in worldwide projects namely F35, A400M, constructs satellite production and test centers, initiates the satellite launching base construction and indigenous helicopter projects, we have the potential to reach this target with our qualified human resources, research institutes, R&D laboratories, SMEs and major players”.
Mentioning that their export target for 2015 was identified as 2 billion USD Aliş continued, “Our defence industry export was in the level of 800 million USD three years ago, we increased our export figures by 100 percent in a three year period. This rate of increase has to gain more momentum without any disruptions. Besides, we would like to set an example for other sectors with this acceleration”.
Prof. İsmail Demir: “Paradigm Shift is Highly Crucial”
Following the speech of Chairman of Defence and Aeorspace Industry Exporters Association (SSI) Mr. Latif Aral Aliş, Undersecretary for Defence Industries Prof. İsmail Demir took the floor in the press meeting and expressed that they were pleased with the export figures and said, “Nevertheless, it is a fact that we would be lagging behind our targets set for 2023 when these increase rates are projected. In order to reach our target levels, we must accomplish a paradigm shift and leap forward, we need a game changer”. Prof. İsmail Demir stressed that Turkey needed to increase the sales of platforms in order to increase the existing level of exports and continued, “The greatest potential in this point will be achieved through the export of our indigenous products. Without doubt, we have to increase the figures and quantities of the exports of aircrafts, armored vehicles, unmanned aerial vehicles, tanks and etc. Having said that, we should also keep in mind our products such as ammunitions, light weapons that have a significant role in export growth as well as provide continuous income, and placing Turkey among world brands in foreign markets”.
Prof. İsmail Demir underlined the importance of offering the state-of-the-art technology to the user as well as a competitive price and quality in foreign sales. Demir said, “We must reach the most advanced level of technology in our productions. There is an absolute need to increase our technological infrastructure, domestic participation rate and advanced technology”. Prof. Demir stressed that the mere participation of the Undersecretariat for Defence Industries and sector players would not be sufficient for Turkey to become a competitive brand in world markets and said, “Turkey has to activate the echo-system. We have to act collaboratively with the Ministry of Science, Industry and Technology, Ministry of Development, our private companies and universities in line with the determined strategies in order to reach our targets”.
Defence Industry’s Priority: Technological Acquisition
Referring to the domestic participation rate in defence industry in his speech, Prof. İsmail Demir mentioned that it was difficult to identify this rate in this area and said, “A local company manufactures an electronic box through domestic resources. Are we supposed to analyze the domestic components of the box to the level of chips and diodes in the cards? Which types of measures are to be used? We have our reservations in this point. We have to ask ourselves until which point we need to examine. If a product is possible to be manufactured with domestic means, then we need to consider the trading terms in the next step. It would be better to import a product rather than continuing its production, if its domestic production is expensive. Then again we have to make certain that we own the sufficient know-how and technology to manufacture the product. In this respect, I hesitate to present the domestic participation rate as it may create concerns on its reliability. Yet, we can say that it is approximately 55-60 percent”.
Turkey is Preparing to Launch Foreign Military Sale and Credit Mechanisms
Emphasizing on the fact that the defence industry’s existing rate of increase towards 2015 targets should be higher, Prof. Demir added that rate of export should be over 20 percent in 2015. Prof. Demir continued, “As we negotiate on the requirements to increase export, we should also consider the methods for this. Moreover, regarding foreign sales we will discuss the interstate sales mechanisms and credit mechanisms such as the “Eximbank”.
SSI: Turkey’s Fastest Growing Exporters’ Association
As the number of members of Turkey’s fastest growing exporters’ association increases to 400 from 60 members in a relevantly short period of 4 years, the defence industry export figures reached a level of 1.647 billion USD from 884 million USD during the aforesaid period. In Turkey, the overall export rate showed an increase of 4% and in the defence industry the increase rate was 18.7%. Regarding the general performance of Turkey in 2014, total industrial exports increased by 4.3%, the increase in automotive industry was 4.5% and in machinery and mechanical parts this increase rate was 4.3%.
Export Rate to NAFTA Countries was 34%
NAFTA countries were at the top of Turkey’s list of exports based on regional distribution and Turkey’s sales to these countries was 33.8%. The rate of export to European Union countries was 25.3% and Middle Eastern countries remained as third on the list with a rate of 15.1%. Increase in export rates in Far East and Africa – the regions in which the existing export rate was expected to be increased in 2015 – were observed as 10.2% and 4.7%.
Turkey Gearing Up in 2015
Declaring that Turkey will be taking part at the most important defence fairs of the world in 2015 with “Turkey Concept”, SSI Chairman Latif Aral Aliş expressed, “With the protocol signed with the Undersecretariat for Defence Industries, the concepts of the fairs where Turkey will attend will be determined by SSI. Therefore, we can say that more a aggressive, planned and efficient era has started”.
Undersecretary for Defence Industries’ Critical Question regarding T-LORAMIDS program
During the press meeting in which the export activities of 2014 were reviewed and expectations for 2015 were declared, Undersecretary for Defence Industries Prof. İsmail Demir replied to the questions regarding the agenda and made important statements on the T-LORAMIDS programme, the outcomes of which are awaited impatiently by all. With regards to the ongoing process concerning the Long-Range Air and Missile Defence tender, Prof. Demir stated, “Finalization of the tender is not difficult in terms of procurement, but we have to see the big picture. Currently, Turkey is developing short range and medium range air defence systems, the system tests are ongoing. The long range air defence system also has categories in itself. We will be gaining crucial capabilities through this system to be acquired in the coming years. Today, if we wish to have the most improved air defence system, we would also like to have the most developed system 10 years later. At this very point, we have to ask ourselves this critical question: “Would the system acquired today be sufficient for the struggle against the threats ten years later? If we settle with a direct procurement, we may be speaking of another procurement programme in 10-15 years’ time. Our aim is to have a technological competence through the acquisition of a technology within this period. We wish and struggle to realise this technological acquisition in a comprehensive manner within this period that seems to be prolonged”.
